OKLAHOMA CITY – An Oklahoma City attorney who represents more than 200 marijuana-related businesses in Grady County claims his clients are operating inside the law although recent headlines suggest others are selling legally grown marijuana on the black market.
Oklahoma has licensed more than 7,000 grow operations and more than 400,000 medical marijuana cardholders, so it’s not inconceivable that some businesses might be conducting business outside the law, attorney Matt Stacy acknowledged in an interview with Southwest Ledger.
“I’m sure black-market sales do occur, but I’m very strict on my clients,” he said. “Grow operations have to register with five different state agencies so it seems strange to sell illegally when these agencies can be at their doorstep in a moment’s notice. It (black-market sales) is not as widespread as it may seem. These businesses are heavily scrutinized because it’s marijuana, so I don’t see this being as big a deal as it might seem.”
Agents at the Oklahoma Bureau of Narcotics and Dangerous Drugs Control would disagree. In recent weeks, agents have raided three grow operations and seized more than 25,000 plants with a potential street value of $38.5 million. Two of the raids occurred in Logan County and another took place in western Oklahoma’s Beckham County. During the latest raid in Logan County, OBN agents seized 4,700 plants. About 21,000 marijuana plants were seized in the other two raids.
OBN spokesman Mark Woodward said arrests have not been made, but several Chinese nationals were detained at all of the raids, which are part of a larger, more complex investigation. Woodward said these types of grow operations are substantial regardless of the comments Stacy made. However, the OBN spokesman said he couldn’t offer further comments.
“I don’t know what he’s referring to so I can’t respond,” Woodward said.
Stacy claims marijuana grow operations are popular in Oklahoma because of inexpensive land, lax enforcement and low license fees. It’s not because illegal grow farms are profiting more than legal ones, he said.
“There’s a good market for agriculture and the way the laws are written (in Oklahoma),” he said. “The license fee is $2,500 and it’s not overly burdensome as it is in other states. There’s also no caps or limits on the number of plants that can be grown and that’s attractive to people. In other states, it (grow operations) only favor large companies.”
Although starting a grow farm can be inexpensive, maintaining the farm can be extremely time-consuming and expensive as owners seek to find buyers which are limited by state law. Grow operators can only sell to Oklahoma dispensaries and state processors.
“One of the biggest questions I get is ‘do you know where I can sell my product,’” Stacy said. “You’ve got 7,000 licensees, but not all of them are active and the ones that are active are not all successful. It’s not easy. You don’t just throw stuff into the ground, and it grows. You need a product that people will buy. Some growers haven’t produced a harvest in two years.”
In a seven-county area in southwestern Oklahoma, there are 727 marijuana grow farms. Grady County leads the way with 296 operations followed by Garvin County with 154. Comanche County has 108 growers and Stephens County has 100. Kiowa County has 31, Jackson County has 24 and Tillman County has 14 grow farms.
Each marijuana grow farm requires labor and lots of it for those that are successful. In recent news, Chinese nationals are reported to be involved in human trafficking and exploiting workers as part of their operations. A federal government raid in New Mexico reportedly shut down a string of black-market cannabis greenhouses, causing operators to move to Oklahoma along with their migrant workers who reportedly have been victims of human trafficking, according to a story previously published in Searchlight New Mexico.
However, Stacy doesn’t put much credibility into the human trafficking stories.
“It’s like (wheat) harvest,” he said. “You have lots of labor and then the labor leaves. You do have a lot of people living on the job site like oil field workers. They file and pay taxes at the end of the year, and they are required to have valid work visas.”
Stacy confirmed that his marijuana grow clients have been thoroughly investigated, but no violations were found by any state agency.
“There’s no incentive to do anything like that (black-market sales),” he said.
Oklahoma law requires 75% of the grow operation be owned by people who have lived in the state for at least two years, which has left some law enforcement officials believing that excessive land prices paid by Chinese nationals are off-the-book payments to state landowners who have met the residency requirements and can qualify for the grow license. Some grow operators have paid as much as three times the value of land, Woodward said.
“It (land prices) are certainly incredible right now,” Stacy said. “It leads to a lot of competition, but I don’t think anything is illegal. Land purchases have to be recorded and property taxes have to be paid ever year. There’s no nefarious third-party coming in. It surprises me there’s criticism about someone paying too much for the land. The same thing has been happening with oil and mineral rights for years.”
Stacy said a land purchase is the beginning of a grow operation, which ultimately will include placement of infrastructure, water, fencing, sewer and electricity. As an example, a grow operator might pay $200,000 to $250,000 for 20 acres. However, the operator might spend an additional $1 million to $1.5 million for the infrastructure that’s needed to start the grow farm, Stacy said.
Many of Stacy’s clients were successful Chinese restaurant owners in California and Colorado whose operations were decimated by the COVID pandemic. In an effort to rebuild, they came to Oklahoma to embark on a new venture in the medical marijuana growing fields, he said.
“It’s not my clients who are getting busted,” he stated.
Stacy compared OBN’s raids to the 1920s Prohibition era when police would bust an illegal saloon or speakeasy and smash all of the bottles filled with alcohol.
“In this case, they (OBN agents) are cutting down all the plants instead of just seizing them,” he said. “It’s a complete destruction of all the assets. A lot of these people are not even arrested. These people (his clients) have put everything into it and want to do the right way. There’s no advantage in getting a license when you’re going to operate illegally.